Wed, Sep 05, 2007 - Page 11 News List

Google eyeing additional Chinese content providers

BIG MARKET The Internet search giant announced it welcomed opportunities to work with other venture capital firms as it seeks to catch up with Baidu.com

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Google Inc, trailing Baidu.com Inc (百度) in China's online search industry, plans to increase investments in content providers to win share in the world's second-largest Internet market.

The company acquired last December a minority stake in Shenzhen Xunlei Network Technology Ltd (深圳迅雷網路技術), whose software lets users download music and videos, in partnership with Fidelity Asia Ventures and Ceyuan Ventures. Last month it also bought shares in Tianya Internet Technology Ltd (天涯線上網路科技), a developer of social-networking sites.

"We are open to work with other venture capital firms in making investments," said James Mi (宓群), head of corporate development for China, Taiwan and Hong Kong at Mountain View, California-based Google.

Venture capital firms "can bring value" to the invested company, he said in an interview in Hong Kong on Aug. 31, without elaborating.

Google, whose advertising sales in China are less than 50 percent of Baidu's, also intends to hire 100 engineers each year in China and Taiwan to develop Web services.

Google did not disclose the size of its stakes in Tianya and Shenzhen Xunlei. The company had made "a couple" of other investments in China, Mi said, declining to elaborate.

He also declined to say whether Google may consider buying controlling stakes in Chinese companies.

"The minority investments are helping the company create more opportunities for strategic partnerships," Mi said.

Google last month introduced trials of a new service that lets users search for Chinese-language blogs and developed two online-socializing services with Tianya.

Online advertising sales in China may surge more than sevenfold to US$3.1 billion in 2011, from US$420 million in 2005, Credit Suisse Group estimated.

At present, Google has almost 200 engineers in Shanghai, Beijing and Taipei, Lee Kai-fu (李開復), the company's China president, said last month.

Google's development team in the region is the company's biggest outside the US, Lee said.

In the second quarter, Baidu accounted for 58 percent of China's Internet search market, more than double the 23 percent share of its closest rival, Google, Beijing-based researcher Analysys International said.

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